Week in Review

Tens of millions of people didn’t have health insurance. So we had to revise one-sixth of the U.S. economy to provide insurance for those who did not have it. And once we made health insurance affordable with the Affordable Care Act the people would beat down the door to buy it (see Just 22% of likely ObamaCare users have visited the site posted 11/9/2013 on the New York Post).

Only 22 percent of Americans who say they plan to get insurance through ObamaCare have actually visited the health plan’s Web sites, according to a Gallup Poll…

About one in four say they are more likely to pay a fine rather than get insurance.

So, those people who had no health insurance apparently don’t want health insurance. As one in four would rather pay a fine than buy the health insurance we’re revising one-sixth of the U.S. economy for. Guess we don’t need the Affordable Care Act after all.

Week in Review

Governments love Keynesian economics. As it’s a backdoor to a managed economy. The Soviet Union failed so we can’t have any more managed economies. But if we call things ‘stimulus’ and ‘investments’ we can pretend we don’t have a managed economy when we actually do. Which is why governments love Keynesian economics. It lets them, the brilliant people, use their superior intellect to make the economy better. Because they can figure out what we’re thinking. Even though Google can’t (see Google admits the human brain beats an algorithm by Eric Rosenbaum, CNBC, posted 11/9/2013 on Yahoo! Finance).

This past week, there was an old-school battle of wits that captured the world’s attention: a chess championship…

It was a good reminder that even with the overwhelming nature of the information economy and long past Garry Kasparov’s waving of the white flag against IBM’s chess-playing grandmaster machines, human ingenuity still has a role to play-and, in fact, even Google admitted as much this past week. There are just some tasks at which Google’s algorithms remain at a competitive disadvantage to actual human beings, one being personalized answers to questions that require expert assistance. And so Google announced its “helpouts” product, which the New York Times said was “an acknowledgement by the company that its search engine misses a lot of information that people want.”

People don’t say “I’ll use an Internet search engine to find that information.” No. They say “I’ll Google it.” Sometimes even when they’re using Yahoo or Bing. It’s like Kleenex came to mean tissue. And how Xerox came to mean photocopy. We tend to call things by the industry dominator of those things. And Google dominates the business of trying to figure out what other people are thinking. So they’re the best at trying to figure out what other people are thinking. But even they admit they can’t figure out what other people are thinking.

This is why Keynesian economics fail. No one can figure out what other people are thinking. Let alone hundreds of millions of people. Which is why America became the world’s number one economy when the government was NOT trying to figure out what people were thinking to manage the economy. That changed during the latter half of the 20th century. And now the American economy is not what it once was. Because Keynesians are no better than Soviet planners. And the more they try the more they risk suffering the same fate of the Soviet Union. For the Soviet Union wasn’t defeated by a superior military. They were defeated by a superior economic system.

Week in Review

There are millions of transgender people who are being discriminated against in the workplace just as there are millions of people signing up for Obamacare. President Obama can say both. But even he must know neither is true (see Senate passes LGBT anti-discrimination bill by Leigh Ann Caldwell posted 11/8/2013 on CNN).

For the first time, the U.S. Senate approved legislation that would protect gay, lesbian and transgender employees from discrimination in the workplace…

Opposition in the Republican-controlled House is strong, minimizing any chance the measure will become law. House Speaker John Boehner also opposes it.

Still, President Barack Obama urged the House to take the bill up and said he would sign it.

“One party in one house of Congress should not stand in the way of millions of Americans who want to go to work each day and simply be judged by the job they do,” the President said in a statement. “Now is the time to end this kind of discrimination in the workplace, not enable it. I urge the House Republican leadership to bring this bill to the floor for a vote and send it to my desk so I can sign it into law.”

The bill would provide the same protections for LGBT workers as are already guaranteed on the basis of race, gender and religion.

It would not be lawful for employers to discriminate based on a person’s “actual or perceived” sexual orientation or gender identity…

Millions? That must mean there are more than 2 million transgender people in the United States trying to get a job as this law basically adds “a person’s “actual or perceived” sexual orientation or gender identity” to a long list of federal protections. According to a study by the Williams Institute only about 0.3% of adults are transgender. According to the U.S. Census Bureau the U.S. population is about 313.9 million. If we subtract those under 18 years of age (23.5%) and retirees (13.7%) from the total population that leaves 197.1 million people of working age. Of this 197.1 million only 591,414 are transgender according to the Williams Institute study. Which is 0.19% of the total population. In comparison the latest Employment Situation Summary from the BLS shows the official unemployment rate (U-3) is 7.3%. While the more accurate unemployment rate that counts all people who can’t find a job is at 13.8%. But the more accurate picture of the economy is the labor force participation rate. Which is now at 62.8%. Meaning that there are 91.5 million people who have left the labor force because they can’t get a job.

There are not millions of transgender people being discriminated against in the workplace. As there are only about a half million people who call themselves transgender in the nation. But there are 91.5 million people who can’t find a job. Perhaps that is the problem Congress should be working on. Rolling back one of the most business-unfriendly environments ever to exist in the U.S. To create jobs for the 91.5 million. As well as the half million.

This legislation is, obviously, a political maneuver. The Senate passed this bill so it can die in the House. So they can say, “See? House Republicans hate LGBT people.” Which is how the left wins elections. By making their base hate Republicans. Which is why President Obama was able to win reelection despite his policies keeping 91.5 million people out of a job. Despite a part of his base—the young—suffering the highest levels of unemployment. But they will continue to suffer and vote Democrat. Because Republicans hate LGBT people. Even if it’s not true. As long as there is a perception of it that’s good enough for them. Even though it would be easier for LBGT people to get a job if there weren’t 91.5 million people on line looking for a job.

Week in Review

The Affordable Care Act is making health insurance unaffordable for many. Especially for those young and healthy who are being whacked open like a cash piñata to pay for the poor, old and sick. Which is why they are losing their health insurance. So they must enter the exchanges. And pay for a lot of insurance coverage they will never use. Well, to be fare, chances are they will never use any of their insurance with those sky-high deductibles. Making any doctor visit an out-of-pocket visit.

But that isn’t the only place the Affordable Care Act is shaking down people. Obamacare is also shaking down doctors. By cutting their Medicare and Medicaid reimbursements. Making them take pennies on the dollars. Making it hard for those in a private practice to pay their staff. And their bills. Which isn’t why they went into medicine. So these doctors are leaving Medicare and Medicaid. Some are even retiring. Leaving the profession instead of being beaten up by Obamacare. So just as Obamacare is giving more free health care to people there will be fewer health care providers. Which puts a story like this into a new light (see Sicker heart attack patients fare worse in July by C. E. Huggins posted 11/7/2013 on Reuters UK).

Rumor has it the worst time and place to be sick is in a teaching hospital in July, when new doctors-in-training enter the wards and others are promoted. A new study of heart attack patients shows this pattern of worse outcomes known as the “July effect” may indeed be true – but only for the sickest people.

“Patients who are already at high risk of inpatient mortality – because of their age and other (co-existing) diseases – are likely the most to be affected by physician inexperience in July,” Dr. Anupam Jena told Reuters Health in an email. He led the research at Harvard Medical School in Boston…

“Our study is different because it recognizes that the July effect should not be present for all patients, but primarily those patients for whom small clinical errors or relative physician inexperience can substantively impact patient outcomes,” Jena said.

There will be a new name to explain another rise in inpatient mortality. The Obamacare effect. Where fewer health care providers will have to do more with less. Increasing wait times. Overworked doctors will spend less time with each patient. And they will make mistakes. Or miss things they might have caught if they had more time.

So in the future as you sit around with your grandchild on your knee you can talk about the good old days. Before the Obamacare effect. When we rushed people to the hospital to make them well. And most got well. Unlike after the Obamacare effect. Which turned the once envied U.S. health care system into the VA hospitals of the Seventies. Places to avoid like the plague. Which is why after the Obamacare effect people would rather take their chances with heart attacks and strokes at home. Instead of going into an Obamacare hospital for near certain death.

Week in Review

There were two Boeing 787 Dreamliners that had a battery problem and a burning smell. Fire is dangerous. Especially in an airplane. There was no loss of life in either incident. And there was minor damage. But two incidents were enough for the FAA to ground the entire Boeing 787 Dreamliner fleet. Yes, fire is dangerous on an airplane. But the government was also mad at Boeing for wanting to make the Dreamliner with nonunion labor. Did this play a role in the grounding? Who knows?

Tesla has now had three lithium-ion fires. Not battery problems with a burning smell. The federal government likes Tesla. Wants everyone to drive an electric car. And subsidizes the electric car industry. Interestingly how Tesla can have three fires that destroy the car entirely and yet receive no scrutiny from the National Highway Traffic Safety Administration. Guess the government thinks Boeing wants to put people on unsafe airplanes while Tesla doesn’t want to put people in unsafe cars (see Tesla reports third fire involving Model S electric car by Ben Klayman and Bernie Woodall, Reuters, posted 11/8/2013 on The Globe and Mail).

Tesla Motors Inc. reported the third fire in its Model S luxury electric car in six weeks, this time after a highway accident in Tennessee, sending shares down sharply on Thursday.

The Tennessee Highway Patrol said the 2013 model sedan ran over a tow hitch that hit the undercarriage of the vehicle, causing an electrical fire on Interstate 24 on Wednesday. A highway patrol dispatcher called the damage to the car “extensive.”

The Model S undercarriage has armour plating that protects a battery pack of lithium-ion cells. Tesla said it did not yet know whether the fire involved the car’s battery.

An electrical fire in an electric car probably involved the car’s battery. For without gasoline and a source for ignition what else can burn in an electric car other than a high energy density device under heat and pressure?

The first Model S fire occurred on Oct. 1 near Seattle, when the car collided with a large piece of metal debris in the road that punched a hole through the protective armour plating…

The second fire took place later in the month in Merida, Mexico, when, according to reports, a car drove through a roundabout, crashed through a concrete wall and hit a tree…

While none of the drivers in any of the Tesla accidents were injured, the glaring headlines about fires were unwelcome for a company whose stock soared sixfold in the first nine months of the year. Since the first fire, Tesla’s shares have lost more than 27 per cent, and this week’s declines are the worst one-week drop since May, 2012.

“For a company with a stock price based as much or more on image than financials, those recurring headlines are highly damaging,” Kelley Blue Book senior analyst Karl Brauer said.

When image is more important than financials that means the electric car isn’t selling. That the costs far exceed revenue. And probably the only things allowing them to stay in business are government subsidies (both for Tesla and for Tesla buyers) and irrational exuberance. Like when investors created a dot-com bubble in the late Nineties. Bidding up stock prices into the stratosphere when companies had nothing to sell let alone profits. At least in the dot-com bubble investors were betting that they found the next Microsoft and were going to get rich. It’s a little more puzzling why investors are buying Tesla stock in the first place.

Tesla may build the best electric cars in the world. But they are still electric cars. The problem is no one is buying electric cars. Except rich people who can afford a third car. With the other two being powered by gasoline. In case they want to travel a long distance. Or drive at night or in the cold with the lights and heat on. Or have to rush a sick child to the hospital when the Tesla is on the charger.

Tesla’s battery pack is made up of small lithium-ion battery cells that are also used in laptop computers, an approach not used by other auto makers. The battery pack stretches across the base of the vehicle. In comparison, General Motors Co. uses large-format battery cells in a T-shape in the centre of the Chevrolet Volt plug-in hybrid car.

Other auto makers have dealt with battery fires in electrified vehicles, including GM’s Volt and Mitsubishi Motors Corp.’s i-MiEV…

“For consumers concerned about fire risk, there should be absolutely zero doubt that it is safer to power a car with a battery” than a conventional gas-powered vehicle, he said on a blog post.

Company executives called that first fire a “highly uncommon occurrence,” likely caused by a curved metal object falling off a semi-trailer and striking up into the underside of the car in a “pole-vault effect.”

Gasoline engines are dangerous, but Americans have learned to live with them over the years, said Tom Gage, the former CEO of AC Propulsion, which developed the drive train for Tesla’s first model, the Roadster.

“Obviously, gasoline can be lit more easily and can burn with more ferocity than a battery can, but a gas tank in a car now benefits from 120 years of fairly intensive development and government regulation regarding how you make it safe,” he said.

Ever smell gasoline? In a parking lot? When you shouldn’t? It might have been more common in the old days. When the Big Three were selling their rust buckets. Which rusted out in the northern climates where they salt the roads during winter. Salt makes metal rust. Including gas tanks. Causing leaks. If you smelled gas, though, did you run away from that car and wait for it to explode? No. You didn’t. You probably thought something along the lines of, “That guy should get that fixed. Gasoline is too expensive to waste like that.”

And you can fix a leaky gas tank. It’s dangerous but you can. For a tank full of gas has more liquid than fumes in it. But an empty gas tank may be full of lingering gas fumes. That can explode if ignited with a welding torch. Which is why before they weld a gas tank they fill it full of sand. So there is no room for any explosive gas vapors.

Gasoline is flammable. It will burn. But it won’t explode. For gasoline in a liquid form is not as dangerous as in other forms. It can leak out of a gas tank. And then evaporate into the atmosphere. In a car wreck something can puncture the gas tank and cause fuel to spill out. If this fuel is ignited it can burn. And the fire will follow the gasoline back to the source. If the fire reaches the gasoline fumes under pressure in the gas tank there can be an explosion. A very big one at that. But if the fire department is on the scene they can wash that gasoline away with a fire hose. And prevent any fire or explosion. When a lithium-ion battery burns, though, throwing water on it won’t do much.

For gasoline to power a gasoline-powered car we first have to vaporize it. Mix it with oxygen (pulled from the air). Compress the air-fuel mixture. And then ignite it with a spark. That’s when it’s dangerous. When it’s inside our engines. Not in the gas tank. For a piece of metal can puncture the bottom of a car—including the gas tank—without causing a fire. Whereas it’s a little iffy with a Tesla. If something punctures the batteries covering the bottom of the car there’s a good chance there may be a fire. While if you puncture a gas tank you may just run out of gas.